This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Wendy's, McDonald's, Denny's in Worker's Wages Dispute Spotlight

Stocks in this article: WEN DEN DPZ MCD

NEW YORK ( TheStreet) -- The big news this week on Long Beach Island, N.J., is the fact that Food Network show "Restaurant: Impossible" has been busily transforming the LBI Pancake House, one of the many businesses that was severely affected by Hurricane Sandy.

Host Robert Irvine has been working his magic not only on this LBI dining fixture, but also on the kitchen at the nearby Ship Bottom Volunteer firehouse; also destroyed by Sandy. The restaurant is scheduled to reopen tomorrow morning, and I hope to be there when it does.

Indeed the terms "Restaurant: Impossible" are an accurate description of what is one of the more competitive, and tougher businesses to operate successfully. Just take a look at what Denny's (DENN) went through several years ago, a bankruptcy, then a very long, difficult climb to its recent successes. It's easy to lose focus, as customers tastes change, and recipes become stale. Domino's (DPZ) found that out a few years ago, but hit it head on with an imaginative advertising campaign admitting that its pizza needed much improvement. Since the recipe change, shares have prospered, having nearly quadrupled since 2011. Some chains are not so fortunate; and the road has been littered with failed restaurant ventures.

The costs of running restaurants are high, with labor costs and food costs ranking either first or second, depending on the particular chain. Food costs are prone to inflation, and when combined with labor costs you have the makings of some potentially thin margins. That does not mean that's there's no money to be made; some chains are very profitable, but that can turn on a dime.

All of which makes this week's employee strikes at fast food restaurants around the country all the more concerning. Striking workers, who are seeking $15 an hour, more than twice the current minimum wage, have forced some restaurants to shut down. It is doubtful, in my view, that they will be successful in obtaining the wage increase, and even if they did, customers would likely not pay the price increases that would come as a result.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs